New to DGF

[stewardinlife]

(04-28-2015, 07:46 PM)Jimbo Wrote:

(04-28-2015, 01:17 PM)Dividend Watcher Wrote: I'm just going to say "Welcome" for now. I've got to get back to work for now but you've got a nice list started.

Feel free to ask away.

WOW, DW without time to talk. I ALWAYS enjoy the insights of DW.
My gut feeling is when he has the time he will expand on the previous comments.
No DW, that is not a dig on you, you articulate well and I like reading all the good stuff from everyone.

Jim

And I am all ears for DWs input

[Dividend Watcher]

(04-28-2015, 09:40 PM)stewardinlife Wrote:

(04-28-2015, 07:46 PM)Jimbo Wrote: WOW, DW without time to talk. I ALWAYS enjoy the insights of DW.
My gut feeling is when he has the time he will expand on the previous comments.
No DW, that is not a dig on you, you articulate well and I like reading all the good stuff from everyone.

Jim

And I am all ears for DWs input

OMG, you guys are killing me here.     Don't know where you come up with that stuff. I'm just a bumpkin living in the middle of a corn field.

Welcome again, Paul. Being 40 is not late to the game. You've got lots of time left to do well, especially with the resources you're bringing to the table.

Maybe I'm wrong but from your first post, you sounded like you were just getting into individual company investing rather than picking some mutual funds for your pension & Roth. Somehow you ended up on a "dividend growth" forum. So my first question is, what are you thinking a dividend growth strategy is? I don't mean to put you on the spot (the question is rhetorical) but I just find it interesting with the "total returners", "modern portfolio theory (MPT)" adherents and "indexers" all over the place you chose to join a dividend growth slanted crowd. Of course, not everyone here has the same concept. We're not zombies following the same mindless strategy. For some dividend growth is reserved for just a portion of their portfolio. There's nothing wrong with any of the above. For me, it was the most logical for the time I have available until I need some of that money back and for the time I have to devote to research and watching the market. I tried much of the above but was never very good at it. Maybe I just don't have the mental capacity to be successful at them; who knows.

That being said, and my silly notion that I can help point out some ideas for your journey, my next quesion is do you have a plan or goals? Just "do want to do the best I can" is a little vague to help guide you along the way. I'm big on having a guiding document. I went back into the DGF archives and found these threads that may expound on this point:

• What's Your Plan?
  
• My Portfolio Business Plan
  

If you're a reader of Seeking Alpha, I'd also suggest searching on Bob Wells and David Van Knapp for more on developing a business plan for your portfolio. It would be among their older posts 3-4 years ago, IIRC.

You had a pretty interesting list in your first post. The replies added a bunch more good ones to think about; probably enough to make your head spin. So much so that now you don't know how to narrow it down or which you want to tackle first. So again I paged back through because I know we touched on valuations a while back and found these:

• Stock Valuation Discussion
  
• Screening Criteria
  

There's a ton of good information if you go back through the board. I hadn't realized all the interesting discussions we've had here and so many of our posters contributed some great insights.

Lastly, I'll add to not be afraid of asking "dumb" questions. I ask more than my fair share and the responses are often very illuminating.

Looking forward to your participation.

[Jimbo]

(04-28-2015, 09:40 PM)stewardinlife Wrote:

(04-28-2015, 07:46 PM)Jimbo Wrote:

(04-28-2015, 01:17 PM)Dividend Watcher Wrote: I'm just going to say "Welcome" for now. I've got to get back to work for now but you've got a nice list started.

Feel free to ask away.

WOW, DW without time to talk. I ALWAYS enjoy the insights of DW.
My gut feeling is when he has the time he will expand on the previous comments.
No DW, that is not a dig on you, you articulate well and I like reading all the good stuff from everyone.

Jim

And I am all ears for DWs input

Taking nothing from DW, there are quite a few people here post tons of good stuff.

[Dividend Watcher]

(04-29-2015, 01:40 AM)Jimbo Wrote: ... there are quite a few people here post tons of good stuff.

Agreed!

[Kerim]

(04-29-2015, 02:33 AM)Dividend Watcher Wrote:

(04-29-2015, 01:40 AM)Jimbo Wrote: ... there are quite a few people here post tons of good stuff.

Agreed!

DW -- are you in a different time zone, or really posting at 3:30 in the morning???

[Jimbo]

(04-29-2015, 08:05 AM)Kerim Wrote:

(04-29-2015, 02:33 AM)Dividend Watcher Wrote:

(04-29-2015, 01:40 AM)Jimbo Wrote: ... there are quite a few people here post tons of good stuff.

Agreed!

DW -- are you in a different time zone, or really posting at 3:30 in the morning???

Some of us dont have a life..LOL

[Dividend Watcher]

(04-29-2015, 08:11 AM)Jimbo Wrote:

(04-29-2015, 08:05 AM)Kerim Wrote: DW -- are you in a different time zone, or really posting at 3:30 in the morning???

Some of us dont have a life..LOL

^^^^^^^ This! I've worked 12-16 hours days since last fall. Sometimes I take a weekend off which usually includes Saturday afternoon to Sunday night. Last night I swore I was going to bed before midnight and get up bright & early. So after tossing & turning, I got up and read a few chapters in the latest book I was reading. That didn't help. So I tuned into that surreal world of the Internet.

[stewardinlife]

(04-29-2015, 01:39 AM)Dividend Watcher Wrote:

(04-28-2015, 09:40 PM)stewardinlife Wrote:

(04-28-2015, 07:46 PM)Jimbo Wrote: WOW, DW without time to talk. I ALWAYS enjoy the insights of DW.
My gut feeling is when he has the time he will expand on the previous comments.
No DW, that is not a dig on you, you articulate well and I like reading all the good stuff from everyone.

Jim

And I am all ears for DWs input

OMG, you guys are killing me here. Don't know where you come up with that stuff. I'm just a bumpkin living in the middle of a corn field.

Welcome again, Paul. Being 40 is not late to the game. You've got lots of time left to do well, especially with the resources you're bringing to the table.

Maybe I'm wrong but from your first post, you sounded like you were just getting into individual company investing rather than picking some mutual funds for your pension & Roth. Somehow you ended up on a "dividend growth" forum. So my first question is, what are you thinking a dividend growth strategy is? I don't mean to put you on the spot (the question is rhetorical) but I just find it interesting with the "total returners", "modern portfolio theory (MPT)" adherents and "indexers" all over the place you chose to join a dividend growth slanted crowd. Of course, not everyone here has the same concept. We're not zombies following the same mindless strategy. For some dividend growth is reserved for just a portion of their portfolio. There's nothing wrong with any of the above. For me, it was the most logical for the time I have available until I need some of that money back and for the time I have to devote to research and watching the market. I tried much of the above but was never very good at it. Maybe I just don't have the mental capacity to be successful at them; who knows.

That being said, and my silly notion that I can help point out some ideas for your journey, my next quesion is do you have a plan or goals? Just "do want to do the best I can" is a little vague to help guide you along the way. I'm big on having a guiding document. I went back into the DGF archives and found these threads that may expound on this point:

• What's Your Plan?
  
• My Portfolio Business Plan
  

If you're a reader of Seeking Alpha, I'd also suggest searching on Bob Wells and David Van Knapp for more on developing a business plan for your portfolio. It would be among their older posts 3-4 years ago, IIRC.

You had a pretty interesting list in your first post. The replies added a bunch more good ones to think about; probably enough to make your head spin. So much so that now you don't know how to narrow it down or which you want to tackle first. So again I paged back through because I know we touched on valuations a while back and found these:

• Stock Valuation Discussion
  
• Screening Criteria
  

There's a ton of good information if you go back through the board. I hadn't realized all the interesting discussions we've had here and so many of our posters contributed some great insights.

Lastly, I'll add to not be afraid of asking "dumb" questions. I ask more than my fair share and the responses are often very illuminating.

Looking forward to your participation.

Hello Dividend Watcher, first of all thanks so much for taking the time to explain and point me in the right direction. Agree with you on setting up a goal and a plan, I definitely want to do it. I have been going over the links/suggestions you have provided -- they are very useful. But before I fully draw out a nice plan, I want to clarify some of the queries you have for me.

1. I have been using the pension and Roth IRA for many years, although haven't been contributing the max amounts until about a year ago.

Pension:

I do have to confess that I "blindly" chose an aggressive portfolio for my company's pension after meeting with a rep. I do want to do be diligent in actually rebalancing/choosing a better mutual funds in there, but seem to be at a loss. I would love for you guys to give any suggestions on that.

Roth IRA:

I have it through Vanguard and I placed 90% of the funds in "Vanguard Total Stock Market Index Fund Admiral Shares, VTSAX," this gave me 9.7% growth till date for my investment; and the rest in "Vanguard Long-Term Bond Index Fund, VBLTX " I just recently started the VBLTX.

Again, I would be open to and value your feedback/suggestions.

I do not have any debt except monthly rent.

2. The reason I want to start DGI is I am wanting to start a separate system apart from the retirement vehicle to start generating passive income stream using income/cash sitting in my bank idly doing nothing.

Okay, now to my end goal of what I would like to achieve from DGI:

To be more specific (again, I am yet to come up with a detailed goal/plan), I am wanting to see if I can generate around at least 30K in income from DGI in about 15 - 20 years. I do want to contribute 1K/month (or more as I see fit). Am I reasonable in my expectation, or totally off. Is it possible to achieve this?

Thanks for your feedback.

Paul

[stewardinlife]

(04-28-2015, 12:36 PM)rapidacid Wrote: Good list Paul, tho a bit heavy on Energy.

I'd personally swap in XOM for COP and for Royal I think you're looking at RDS.B rather than ADR as ADR just stands for American Depositary Receipt.

Are you going to accumulate cash or do a DRIP? Keep in mind transaction costs depending on your brokerage.

KO, RTN, CL, CLX, GPS, GIS, WEC, HRS, DEO, PEP, MMM, ROK, PH, MSFT, BEN, TROW are some other names I'd offer to put on your radar if you haven't already taken a look

rapidacid, can you please educate me as to your suggestion to swap in XOM for COP? Thanks. -- Paul

[Dividend Watcher]

Paul, I'm glad I was able to help a little. I was afraid I was being a little too presumptuous.

(04-29-2015, 05:25 PM)stewardinlife Wrote: But before I fully draw out a nice plan, I want to clarify some of the queries you have for me.

It's not necessary to have a "nice plan" right from the start. The one I posted in one of those threads was the 3rd or 4th iteration of mine. I think you'll find that as you learn more, you'll adapt it to align with your goals and what makes sense to you. It doesn't have to look like anybody else's either. The important part is to have some idea in your mind what you want to accomplish and how you're going to get there. Actually, not in your mind. Written down seems the most psychologically effective means of reinforcing your goals and how you're going to get there; hence the "business plan" for your portfolio.

As to the mutual funds, I haven't looked at funds seriously in years so I don't know much about the ones you mentioned. I'm sure others can chime in. Often that's all you have to choose from in pensions/40k(k)s so you make do with the best choices available to you.

(04-29-2015, 05:25 PM)stewardinlife Wrote: I am wanting to see if I can generate around at least 30K in income from DGI in about 15 - 20 years. I do want to contribute 1K/month (or more as I see fit). Am I reasonable in my expectation, or totally off. Is it possible to achieve this?

Let's see, $1k/month for 20 years gets you $240,000. Given a safe and reasonable 3.5% yield on your investments just on that will get you $8,400/year. But that's excluding reinvested dividends, the growth of principal and dividends and also compounding. As Billy Mays used to say, "But wait, there's more!" (As an aside, and I couldn't get it out of my head writing this, Willie Mays used to say "Say hey!" God my mind really wanders at times.)

Let's assume over those 20 years, the value (price) of those stocks increase at 6%/year on average. Add to that a 3% dividend yield which can easily be reached over a few years or judicious picks of companies. That gives about 9% return per year. Pretty conservative numbers in my opinion. Pull out the spreadsheet and use the future value (FV) function. At $12,000/year for 20 years you end up with about $613,000. If you assume you'll be getting about 3.5% yield at the end of those 20 years -- meaning you won't have to increase your risks reaching for yield -- you'll be putting $21,455/year in your pocket. Bump that up to 10% per year appreciation and a 3.75% final yield ends up with $25,762 falling into your pocket annually at the end of 20 years. So can you reach your $30k/year goal? I believe it could be highly probable and might be a realistic goal for yourself. I used some pretty conservative numbers. You can set goal posts along the way to see how you're progressing and adjust as needed.

Hope that gives you some food for thought.

[stewardinlife]

(04-29-2015, 11:27 PM)Dividend Watcher Wrote: Paul, I'm glad I was able to help a little. I was afraid I was being a little too presumptuous.

(04-29-2015, 05:25 PM)stewardinlife Wrote: But before I fully draw out a nice plan, I want to clarify some of the queries you have for me.

It's not necessary to have a "nice plan" right from the start. The one I posted in one of those threads was the 3rd or 4th iteration of mine. I think you'll find that as you learn more, you'll adapt it to align with your goals and what makes sense to you. It doesn't have to look like anybody else's either. The important part is to have some idea in your mind what you want to accomplish and how you're going to get there. Actually, not in your mind. Written down seems the most psychologically effective means of reinforcing your goals and how you're going to get there; hence the "business plan" for your portfolio.

As to the mutual funds, I haven't looked at funds seriously in years so I don't know much about the ones you mentioned. I'm sure others can chime in. Often that's all you have to choose from in pensions/40k(k)s so you make do with the best choices available to you.

(04-29-2015, 05:25 PM)stewardinlife Wrote: I am wanting to see if I can generate around at least 30K in income from DGI in about 15 - 20 years. I do want to contribute 1K/month (or more as I see fit). Am I reasonable in my expectation, or totally off. Is it possible to achieve this?

Let's see, $1k/month for 20 years gets you $240,000. Given a safe and reasonable 3.5% yield on your investments just on that will get you $8,400/year. But that's excluding reinvested dividends, the growth of principal and dividends and also compounding. As Billy Mays used to say, "But wait, there's more!" (As an aside, and I couldn't get it out of my head writing this, Willie Mays used to say "Say hey!" God my mind really wanders at times.)

Let's assume over those 20 years, the value (price) of those stocks increase at 6%/year on average. Add to that a 3% dividend yield which can easily be reached over a few years or judicious picks of companies. That gives about 9% return per year. Pretty conservative numbers in my opinion. Pull out the spreadsheet and use the future value (FV) function. At $12,000/year for 20 years you end up with about $613,000. If you assume you'll be getting about 3.5% yield at the end of those 20 years -- meaning you won't have to increase your risks reaching for yield -- you'll be putting $21,455/year in your pocket. Bump that up to 10% per year appreciation and a 3.75% final yield ends up with $25,762 falling into your pocket annually at the end of 20 years. So can you reach your $30k/year goal? I believe it could be highly probable and might be a realistic goal for yourself. I used some pretty conservative numbers. You can set goal posts along the way to see how you're progressing and adjust as needed.

Hope that gives you some food for thought.

Thank you Dividend Watcher. You guys are very encouraging here, and it really helps me to push forward, at the same time learning something new everyday.

Paul

[rapidacid]

(04-29-2015, 09:13 PM)stewardinlife Wrote: rapidacid, can you please educate me as to your suggestion to swap in XOM for COP? Thanks. -- Paul

That could be an extremely long answer, but from a purely quantitative perspective the recent buyback yield, dividend growth rate, cash flow, payout ratio and fwd p/e are enough to easily tip the scale in favor of XOM in my opinion